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Nabucco Pipeline

A pipeline planned by the EU to carry natural gas from the Georgian/Turkish and/or Iranian/Turkish border across Turkey, Bulgaria, Romania, and Hungary to Austria. Construction was scheduled to begin 2011 and be completed 2015, but it was never begun, and the project was cancelled in 2013.

The 10th ministerial meeting of the WTO held in Nairobi, Kenya, December 15-18, 2015. By declining to reaffirm the mandate for the Doha Round, the members in effect ended the efforts to complete it.

NAIRU

Stands for Non-Accelerating Inflation Rate of Unemployment. It is the level of the unemployment rate at which prices rise at the same rate that they are expected to rise, and thus at which (since expectations needn't change) the rate of inflation does not then rise or fall.

Used as an adjective applied to a strategy in a game, this means that it is part of a Nash equilibrium.

Nash equilibrium

An equilibrium in a game in which each player's action or strategy is optimal given those of other players. E.g., in a tariff-and-retaliation game, zero tariffs are not Nash, since each country can benefit by raising its tariff if others do not. Nash equilibrium has positive tariffs and is likely to be inferior to free trade for all.

Nation

As used in international economics, a nation is almost invariably a country, or occasionally a similar entity (e.g., Hong Kong) with a single, usually independent government.

National

1. (adj.) Of, relating to, or belonging to a nation.
2. (n.) A person who is a citizen or long-term resident of a nation.

A nonprofit, nonpartisan organization based in Cambridge, MA, that assembles economic data and sponsors economic research. Its Business Cycle Dating Committee is also traditionally responsible for identifying the beginnings and ends of U.S. recessions.

National champion

A firm that achieves a dominant position in an industry due to government policies favoring it and encouraging it also to play a major role in world markets. Promotion (and protection) of national champions is one form of industrial policy.

National debt

Although this term looks like it should mean the amount that a country owes to foreigners, in practice it is used instead to refer to the amount that a nation's government owes to anybody, including its own citizens, its government debt. Thus it is the total of a national government's outstanding government bonds.

National defense argument for protection

The argument to restrict imports so as to sustain a domestic industry that will be needed in case of trade disruption due to war. This is a second best argument, since there are a variety of ways of providing for defense at lower economic cost, including production subsidies, mothballing, and stockpiling.

An organization of US companies, the NFTC describes itself as "the pre-eminent business association dedicated solely to international trade and investment issues."

National income

The income generated by a country's production, and therefore the total income of its factors of production. Except for some adjustments that don't usually enter theoretical models, NI is the same as GDP.

The National Trade Estimate Report on Foreign Trade Barriers is issued each year by USTR, reporting on the trade barriers faced by US exports in other countries.

National treatment

The principle of providing foreign producers and sellers the same treatment provided to domestic firms.

Nationalize

To transfer ownership of a private company or a privately owned asset to the national government. Nationalization is sometimes done on entire industries, and often includes firms that were owned by foreigners. Owners may or may not be compensated; if not, this is expropriation.

Use of an event in the real world to mimic a controlled experiment. One group of economic actors must be subject to a change that another group of otherwise comparable actors, the controls, is not. The purpose is to infer the effects of the change on behavior.

An industry with such increasing returns to scale that an economy can only support, at close to minimum cost, a single firm. To avoid the economic inefficiency of monopoly pricing, such industries are often regulated or owned by government. Internationally, this may prompt interference with trade.

Natural person

This term appears in the GATS where it deals with the international movement of employees of firms that are providing services in another country. Persons are called "natural" to distinguish them from "juridical persons," such as partnerships or corporations, which are given certain rights of persons under the law.

Natural resource

Anything that is provided by nature -- mineral deposits, land quality, old-growth forests, fish populations, etc. The availability of particular natural resources is an important determinant of comparative advantage and trade in products that depend on them. Natural resources are primary factors of production.

Natural Resource Governance Institute

An organization that "helps people to realize the benefits of their countries' endowments of oil, gas and minerals." It works "to promote accountable and effective governance in the extractive industries." It produces the Resource Governance Index

Natural trade

Trade that may be either free or restricted, but that is not artificially encouraged by subsidies or other stimulants.

Laws passed by England in 1651 and 1660 that required goods shipped to, and later also from, England to and from the colonies to be carried in English ships. They also imposed other restrictions on trade. However, they were not very effectively enforced.

A financial asset with many of the properties of money, but not all. Savings deposits and foreign currency deposits, for example, are very liquid but cannot be used directly for transactions.

Nearshoring

A version of offshoring that locates production outside one's home country but close to it. Usually refers to the action of moving previously offshored activities closer to home.

Necessity test

A procedure to determine whether a trade restriction intended to serve some purpose is necessary for that purpose.

Negative

1. Harmful. Opposite of positive.
2. Of a number: less than zero. Contrasts with positive.
3. Of a change in a number: moving toward zero if greater than zero or away from zero if less than zero. Opposite of positive.

A decline in size over time, said of an economy's GDP in recession or of the size of a declining firm or industry. Seems like a euphemism, except that no obvious alternative term suggests itself. Shrinkage?

Negative list

1. In an international agreement, a list of those items, entities, products, etc., to which the agreement will not apply, the commitment being to apply the agreement to everything else. For liberalizing agreements, the negative-list approach tends to be more liberal than the opposite positive-list approach.
2. A list of products that cannot be imported into a country.

Negative returns

An extreme form of diminishing returns, in which increasing one input holding other inputs constant causes output to fall. This may plausibly happen due to congestion.

Negative returns to scale

An extreme form of decreasing returns to scale, in which increasing all inputs in proportion actually causes output to fall. Sometimes said to arise due to congestion, although it is doubtful in that case that all inputs are really being increased.

In mathematical Euclidean space, a small set of points surrounding and including a particular point. Thus, for an economic variable, such as an allocation, the neighborhood of a particular allocation includes all those allocations that are sufficiently similar to it.

Neighborhood production structure

A structure of technology for a general equilibrium model due to Jones and Kierzkowski (1986). With an arbitrary but equal number of goods and factors, each factor produces two (different) goods and each good uses two (different) factors, yielding more unambiguous results than usual in high-dimension trade models without specific factors.

Neoclassical

A set of assumptions made by mainstream economists starting in the late 19th century, including firm profit maximization, consumer utility maximization, and market clearing, with corresponding implications for factor prices and income distribution. Contrasts with classical, Keynesian, and Marxist.

Neoclassical ambiguity

In the specific factors model, the fact that the effect of a change in relative prices on the real wage of the mobile factor cannot be known a priori, since the wage rises relative to one price and falls relative to the other.

Neoclassical economics

Most of modern, mainstream economics based on neoclassical assumptions. Tends to ascribe inevitability, if not necessarily desirability, to market outcomes.

1. A view of the world that favors free markets, a minimal role for government in the economy, and economic growth has the mechanism for human progress.
2. A more extreme version of the above, viewed negatively, as emphasizing the freedom of large corporations to make profits and limiting even further the role of government in redistribution and the provision of social services.

Not Elsewhere Specified. This abbreviation, "nes," appears frequently in classifications, of goods and of industries for example, to encompass all other items in a category that have not been included explicitly.

Net

After deduction of something. Contrasts with gross. Exactly what is deducted to get from gross to net depends on the context.

Two goods are net substitutes if a rise in the price of one causes an increase in the compensated demand for the other, thus net of the negative income effect of the price increase. Contrasts with gross substitutes.

Net taxes

Taxes minus transfers. That is, in an economy the net taxes are the total taxes paid by persons and business to government, minus the total transfer payments paid by government to persons and business.

Netherlands Bureau for Economic Policy Analysis

The CPB Netherlands Bureau for Economic Policy Analysis, known simply as CPB, was founded in 1945 and does research on its own initiative and at the request of government and others in the Netherlands.

Network

A set of connections among a multiplicity of separate entities sharing a common characteristic. Networks of firms or individuals in different countries are thought to facilitate trade.

Network Readiness Index

A measure of performance of economies "in leveraging information and communications technologies to boost competitiveness and well-being," produced annually by the World Economic Forum as part of its Global Information Technology Report>.

A proposed non-national world currency to be used for payment and reserve purposes, to be issued by the IMF and intended to maintain a fixed purchasing power in the dollar and euro countries. Proposed in IMF (2010).

A multilateral development bank launched July 21, 2015 by the five BRICS countries as an alternative to the World Bank and IMF, which are perceived to be dominated by the United States.

New Economic Geography

The study of the location of economic activity across space, particularly a strand of literature begun by Krugman (1991a) using agglomeration economies to help explain why industries cluster within particular countries and regions.

New Economy

This term was used in the late 1990's to suggest that globalization and/or innovations in information technology had changed the way that the world economy works. Conjectures included changes in productivity, the inflation-unemployment tradeoff, the business cycle, and the valuation of enterprises.

A good that has been newly invented. Plays a special role in the theory of the product cycle.

New International Economic Order

A set of proposals put forward during the 1970s by developing countries through UNCTAD to promote their interests by improving their terms of trade, increasing development assistance, developed-country tariff reductions, and other means.

1. An initiative by the United States, announced in 2011, that would include joint investment projects in Central Asia, roughly along the route of the ancient Silk Road, and contribute to growth and stability in that region.
2. Name sometimes given to China's One Belt, One Road initiative.

The inability of a nominal variable, such as a price or a wage expressed in money terms (as opposed to real), to change quickly so as to achieve equilibrium. Nominal rigidities tend to be needed in Keynesianmacroeconomic models.

Reduction of tariffs and NTBs in industries other than agriculture. Because agriculture negotiations were challenging, they were separated from others, and the NAMA Negotiations in the Doha Round encompassed all other goods: manufactures, fuels, mining, fish, and forestry products.

Non-automatic licensing

Import licensing that is discretionary, based on an import quota, or performance related.

Non-deliverable forward

A forward contract in which the parties to the transaction settle in cash rather than delivering the currency or good on which the contract was based.

Non-dumping certificate

A document stating that there is no difference between the price of an exported good and the price of the same good on the exporter's home market. Required by some countries for goods they import.

Non-economic objectives argument for protection

The view that a restriction on imports may serve a purpose outside of conventional economic models. Unless that purpose is itself the restriction of trade, this is a second best argument, since changes in output, consumption, etc., can be achieved at lower economic cost in other ways.

A not-for-profit organization that pursues an issue or issues of interest to its members by lobbying, persuasion, and/or direct action. In the arena of international economics, NGOs play an increasing role defending human rights and the environment, and fighting poverty.

Non-market clearing

A situation or economic model in which a market or markets do not clear, perhaps because something prevents prices from adjusting to discrepancies between supply and demand.

Non-market economy

1. A country in which most major economic decisions are imposed by government and by central planning rather than by free use of markets. Contrasts with a market economy.
2. An economy that has been designated as a non-market economy for the purposes of anti-dumping implementation. This allows the use of 3rd-country prices in calculating the dumping margin and is thought to lead to larger anti-dumping duties.

Refers to a restriction that currently has no effect because the behavior that it would prevent would not happen even without the restriction. For example, if a quota limits imports to no more than 1,000, but actual imports are only 900, then the quota is nonbinding.

Nonconvexity

The property of an economic model or system that the sets representing technology, preferences, or constraints are not mathematically convex. Because convexity is needed for proof that competitive equilibrium is efficient and well-behaved, nonconvexities may imply market failures.

Nondiscrimination

The treatment of all others equally, or at least subject to the same rules and procedures. In trade this often refers to levying the same tariffs against the imports from all other countries and the absence of nontariff barriers that put some imports at a disadvantage compared to others.

Nondistorted

Without distortions. Many propositions in trade theory are strictly valid, often only implicitly, only in nondistorted economies.

A transfer payment that does not introduce inefficiencies. This means mainly that it does not provide an incentive to change production or consumption choices.

Nonhomothetic

Any function that is not homothetic, but usually applied to consumer preferences that include goods whose shares of expenditure rise (and others that fall) with income.

Nonproduction worker

A worker not directly engaged in production. In empirical studies of skilled and unskilled labor, data on nonproduction workers are often taken to represent skilled labor, though the correspondence is far from exact.

Any policy that interferes with exports or imports other than a simple tariff, prominently including quotas and VERs.

Nontariff measure

Any policy or official practice that alters the conditions of international trade, including those that act to increase trade as well as those that restrict it. The term is therefore broader than nontariff barrier, although the two are usually used interchangeably.

Nontradable

1. Not capable of being traded among countries.
2. A good or service that is nontradable, with nontradables referring to an aggregate of such goods and services.

A good that is not traded, either because it cannot be or because trade barriers are too high. Except when services are being distinguished from goods, they are often mentioned as examples of nontraded goods. Or at least they were until it became common to speak of trade in services.

Nonviolation

In WTO terminology, this is shorthand for a complaint that a country's action, though not a violation of WTO rules, has nullified or impaired a member's expected benefits from the agreement.

Noodle bowl

Term sometimes substituted for Bhagwati's spaghetti bowl, especially by Asians.

An economic model in which two countries, North and South, represent developed and less developed countries respectively.

North-South trade

Trade between the developed countries (North) and developing countries (South). This term is used less and less, as the division between these two groups of countries has become blurred by the economic growth of many formerly developing countries.

Notify

Members of the WTO are expected to notify the WTO of changes in their trade policies. Thus, for example, the WTO is able to keep track of regional trade agreements that have been notified to the WTO.

The unit in which prices are measured. This may be a currency, but in real models, such as most trade models, the numeraire is usually one of the goods, whose price is then set at one. The numeraire can also be defined implicitly by, for example, the requirement that prices sum to some constant.